1. The following are the balance sheets of Kings paper works Ltd. For the two years at 31^st December 2013 and 2014.

Additional information:

During the year, fixed assets were purchased at a cost of sh. 56,000. Fixed assets which cost sh. 36,000 were disposed of for sh.25, 000. The book value of these assets was sh. 15,000 and the profits has been included in retained profits.

Required

Prepare a funds flow statement for Kings Paper Works Ltd for the year ended 31^st Dec 2014. (15 marks)

Items 31/12/2013 31/12/2014 Kshs. Kshs. Issued share capital at sh.10 per share Ordinary shares 180,000 230,000 Retainer profits 75,000 92,000 10% debentures 60,000 75,000 Taxation payable 1st January following 29,000 32,000 Trade & expenses creditors 32,000 34,000 Proposed dividends (gross) 5,000 6,000 381,000 469,000 Fixed assets at cost 230,000 250,000 Less depreciation -56,500 -62,000 173,500 188,000 Inventory 120,000 146,950 Debtors 42,000 41,500 Balance at bank 45,500 92,550 381,000 469,000